• Alex Pettee, CFA

REITs Rebound | Vaccine Optimism | Rent Collection Improves

Updated: Sep 10, 2020

Daily Recap

  • U.S. equity markets finished Monday with the S&P 500 eclipsing fresh record-highs following positive developments on coronavirus treatments and vaccines ahead of a busy week of economic data and political newsflow.

  • Adding to its gains of 0.8% last week, the S&P 500 finished higher by 1.0% while the Dow Jones Industrial Average rallied 378 points and the Nasdaq gained 0.6%.

  • Following declines of 0.4% last week, Equity REITs finished higher by 0.7% today with 14 of 18 property sectors finishing in positive territory. Mortgage REITs, meanwhile, jumped 2.9%.

  • Reversing recent trends in which large-cap tech stocks powered the gains with relatively narrow market breadth, the economically-sensitive sectors were among the leaders today in a broad-based rally.

  • Fresh data from NAREIT today showed that rent collection continues to improve across the major real estate property sector, so far defying concerns over the "fiscal cliff" in early August.

Our Real Estate Daily Recap discusses the notable news and events in the real estate sector over the last trading day and highlights sector-by-sector performance. We publish this note every afternoon at HoyaCapital.com and occasionally on Seeking Alpha to cover significant news and events. Subscribe to our free mailing list to make sure you never miss the latest developments in the commercial and residential real estate sectors. You can also follow our real-time commentary on Twitter and LinkedIn.

U.S. equity markets finished Monday with the S&P 500 eclipsing fresh record-highs following positive developments on coronavirus treatments and vaccines ahead of a busy week of economic data and political newsflow. Adding to its gains of 0.8% last week, the S&P 500 ETF (SPY) finished higher by 1.0% while the Dow Jones Industrial Average (DJI) rallied 378 points and the Nasdaq 100 ETF (QQQ) gained 0.4%. Following declines of 0.4% last week, the Equity REIT ETF (VNQ) finished higher by 0.7% today with 14 of 18 property sectors finishing in positive territory. The Mortgage REIT ETF (REM) finished higher by 2.9%, rebounding from its 2.7% decline last week.

Reversing the trends of the last few weeks in which the large-cap technology stocks powered the gains with relatively narrow market breadth, the economically-sensitive sectors were among the leaders today. 10 of the 11 GICS equity sectors finished higher on the day led by the Energy (XLE), Financials (XLF), and Industrial (XLI) sectors. The Small-Cap (SLY) and Mid-Cap (MDY) indexes closed their underperformance gap relative to the large-cap index, but each remains in negative territory on the year. Homebuilders and the broader Hoya Capital Housing Index finished higher today ahead of a busy week of housing data as investors will be looking to see if the housing sector can continue to lead the post-pandemic economic rebound.

As discussed in our Real Estate Weekly Outlook, we have another busy slate of economic and housing data in the week ahead. On Tuesday, we'll see New Home Sales for July, which last month surged 13.8% in June and are expected to rise again from last month. Also on Tuesday, we'll see the two major home price indexes - the FHFA House Price Index and the S&P Case Shiller Index for June. Most home price indexes have shown a notable acceleration in home prices this summer amid a wave of homebuying demand and record-low inventory levels. Then on Thursday, we'll see Pending Home Sales for July as well as Initial and Continuing Jobless Claims data and the first-revision of second-quarter GDP. Finally, on Friday we'll see Personal Income & Spending and PCE Inflation data.

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